KUALA LUMPUR: Sapura Energy Bhd narrowed its net loss to RM31.09 million for the third quarter (Q3) ended Oct 31, 2018, from RM274.41 million in last year’s corresponding period.
Revenue rose by 17% to RM1.50 billion for the quarter under review from RM1.28 billion a year earlier, mainly attributed to the higher revenue from its engineering and construction (E&C) as well as exploration and production (E&P) business segments.
Increased E&C activities during the quarter boosted revenue by 17% to RM959.8 million from RM822.3 million.
The group’s drilling segment posted a much lower loss before tax of RM11.7 million from RM93.1 million previously, it said in a statement here today.
Sapura Energy explained that the number of working rigs increased to seven compared with six in the previous quarter.
In the E&P segment, the company recorded a pre-tax profit of RM37.1 million, up RM28.3 million compared with the same quarter last year. The segment’s revenue was 43% higher at RM296.2 million.
Sapura Energy attributed the improvement to higher production liftings and the effects of the higher average realised oil and gas prices achieved.
“The improved results are initial signs of the group’s turnaround.
“We are seeing an upward trend in all segments, in particular, the E&C business, driven by an increase in global investments and activities.
“As our order book grows, revenue will move up in tandem with project completions from commencement to book recognition,” said Shahril Shamsuddin, its president and group CEO.
The group’s total contracts in the current financial year to date had reached RM8.5 billion, representing a three-fold increase compared with the corresponding period of 2017.
New contracts secured, including its most recent wins in Mexico, Malaysia and India, have resulted in the group’s order book growing to RM18.6 billion.
Sapura Energy recently obtained approval from its shareholders for its rights issue amounting to RM4 billion, which is part of the group’s efforts to ensure it has sufficient capital.
The company also noted it was working towards completing its strategic partnership with Austria’s OMV after the joint venture partners signed a share subscription agreement and shareholders’ agreement last month.
The transaction would result in Sapura Energy receiving cash proceeds of up to US$975 million (about RM4.06 billion).
It added that its third corporate initiative may involve forming a synergistic collaboration with a potential strategic partner to unlock the value of its drilling business.
The group also recently marked a significant milestone as one of the latest pre-qualified contractors in Saudi Aramco’s long-term agreement (LTA) programme to enable Sapura Energy to participate in bids for engineering, procurement, fabrication, transportation and installation (EPCI) contracts by Saudi Aramco.
Shahril said having the potential to win new contracts and be appointed to the LTA programme were strong validation of the group’s competitiveness and capabilities, including its drive to invest in the development of capabilities and skills.